What would you do?

[Anonymous]

Hello Everyone, my husband and I would love to get an advice from you on how to handle the situation we are in.

We pay our nanny who has been with us for 2 years on the books. We gave her W-2 in January. We paid her $37K in 2012 for one child. WE also decided to pay her share of Social Security taxes on top of our share which adds up to what we pay for child care. We did not withhold income tax and now she needs to pay it. Starting in March she started talking about collecting this sum of money, mentioning she sent money to her home country to pay her property tax there, talking to my mother when she was in town about how she does not have the money, etc

Last sunday she called me asking me to change her status on W-2 to statutory employee believing this will help her not to pay taxes. Since it is illegal, we did not do it. I had to explain to her though that this is illegal, would not serve any purpose, etc. Then she was asking us to reissue her W-2 with a smaller amount which we again did not do. Since she is a good nanny to our kids and I feel sorry for her, last friday I gave her a sum of money which I believe will cover about 30% of her tax liability telling her it was a bonus for her work. Tonight she calls telling us she does not have the money to pay the IRS and asking me to give her $3,000 tomorrow (MOnday) so that she can do it. she was saying that she will work for free for the next month or so until she covers the debt.

My husband is quite irritated saying she can just take the money and run. I do not think she would do such a thing. However, I am pissed that she is trying to make this our responsibility and at the last moment while we are trying to come up with what we will be paying to IRS for her share of SSN. I also do not like the fact that she was able to pay her property taxes in Bulgaria but trying to make her income tax our responsibility.

Am I being petty or am I being taken advantage of? Need a reality check here

I also should add in fairness that she is a pretty good nanny

[Anonymous]

You are correct to feel this way. She may be a good nanny but she is not smart.

Her lack of financial responsibility has become your problem.
$37K is generous. She needed to plan better.

Good nannys are tough to find but I think she is taking advantage. Pay her or not, I think the relationship will
Go down hill from here, fast.

How is she planning to make ends meet if you don't pay her
For the next few months?

[Anonymous]

If she wanted you to lie and change her tax -w2s, what makes you think she is ethical in most situations.

She wanted to fraud the government.

It's not like she is minimum wage and working like a dog to
Pay bills. $37 K for one kid is decent and it is her problem, not yours.

If you "lend" her the money, she'll need to tell you how she's changing thigs to avoid this circumstance for the next tax year.

Plus, if you give her the $$$ it may cause a tax headache for you again next year.

[Anonymous]

I basically agree w/ the previous comments. This is trouble, probably the start of a worsening relationship overall, and it sounds like her salary is reasonable and you have been generous on top of that.

She didn't manage her money well - that happens. But you cannot be doing anything illegal and it's wrong to ask that of you. Also - upfronting that much salary is always risky. Your husband is right - she could take off. Or, she could just call in sick and/or be late/unreliable a lot and you feel like you're stuck w/ her. Or she pays the IRS but then has nothing to live on for the next few weeks and you feel guilty/worried/responsible and she just gets more expensive for you and more in the hole debt-wise.

FYI, the IRS can work out payment plans. She could file for an extension and spend the next several months saving up to pay the taxes, etc... There are ways to deal with this responsible that are legal and allow/require her to take responsibility.

But overall the whole scenario worries me and I would be troubled about her long-term employment with us. Honestly, I'd start thinking about/preparing for needing a new nanny - potentially without a lot of notice - in the near future.

[Anonymous]

Anonymous wrote:I basically agree w/ the previous comments. This is trouble, probably the start of a worsening relationship overall, and it sounds like her salary is reasonable and you have been generous on top of that.

She didn't manage her money well - that happens. But you cannot be doing anything illegal and it's wrong to ask that of you. Also - upfronting that much salary is always risky. Your husband is right - she could take off. Or, she could just call in sick and/or be late/unreliable a lot and you feel like you're stuck w/ her. Or she pays the IRS but then has nothing to live on for the next few weeks and you feel guilty/worried/responsible and she just gets more expensive for you and more in the hole debt-wise.

FYI, the IRS can work out payment plans. She could file for an extension and spend the next several months saving up to pay the taxes, etc... There are ways to deal with this responsible that are legal and allow/require her to take responsibility.

But overall the whole scenario worries me and I would be troubled about her long-term employment with us. Honestly, I'd start thinking about/preparing for needing a new nanny - potentially without a lot of notice - in the near future.

+1. Don't front her the money and tell her to work out a payment plan with the IRS. You are already being generous by paying her portion of FICA. If you do want to help her manage her money going forward, you can start withholding personal income tax from her paychecks. We did this for our nanny.

[Anonymous]

OP here Thank you for supportive replies. I did talk to her about setting up a payment plan with the IRS and offered to help filling out forms/calling IRS etc. She declined saying her accountant will do it. In the course of the conversation it came out that the bonus I gave her last week (which should cover about 1/3 of her liability) was deposited into her IRA following advice from her accountant since it lowers her liability. That is why she does not have any money she was saying. Now I am feeling even more irritated. Thanks again for your replies

[Anonymous]

Don't give her any more money!

[Anonymous]

"the bonus I gave her last week (which should cover about 1/3 of her liability) was deposited into her IRA following advice from her accountant since it lowers her liability. That is why she does not have any money she was saying."

wow! unbelievable nerve this woman!!

[Anonymous]

OP, that is phenomenally annoying. If she is paying an accountant, and putting the money you gave her into an IRA instead of covering her debt, then I think the way she is whining to you about money and asking for an advance is utterly shameful.

Honestly, I don't believe an accountant would give her that kind of advice - if you owe the IRS money you pay it, you don't advise a client to put their available cash into an investment and ignore the IRS. That's absurd.

She is starting to sound far more questionable than someone who simply has poor money management skills. If this were my nanny it would have very seriously damaged the relationship. I'm honestly not sure I would trust her anymore and I'd probably start looking for someone else.

I hope it makes the question of giving her any more advance monies very easy for you though!

[Anonymous]

She is taking advantage of you. Youbhave been way too generous.

[mbd]

Fire her and find someone who appreciates how much you do for her.

[Anonymous]

Where did you find your "nanny", OP?

[Anonymous]

She is taking you for a ride. She is an older, experienced nanny, yes? This behavior is known in nanny circles as a bachelor way of getting paid under the table. Just beg for the money around tax time and viola instant bonus!!!

[Anonymous]

Bachelor = back door